Trade deficit narrows on falling imports

Bangladesh’s trade deficit narrowed by 41.62 per cent year-on-year to $14.61 billion in the first nine months of the current fiscal year, mainly for the falling trend of import payments triggered by the austerity measures.

The deficit fell by $10.41 billion during the July-March period of FY23, show the latest data from the central bank. The trade deficit was at $25.03 billion during the same period of the last fiscal year.

During July-March of FY23, import payments fell by 12.33 per cent to $53.93 billion, when compared year-on-year.

On the other hand, the country’s export earnings grew 7.76 per cent to $39.32 billion in the first nine months of this fiscal year, show central bank data.

The import growth has fallen following several measures aimed at curbing imports amid the ongoing pressure on forex reserves.

In July last year, the central bank had imposed a 100 per cent LC margin against the import of luxury and nonessential items.

The same month, the regulator also asked banks to inform it 24 hours before opening an LC worth $3 million or above as part of its austerity measures.

The negative current account balance declined to $3.64 billion in July-March of this fiscal year from negative $14.34 billion a year ago, according to the Bangladesh Bank data.

The Bangladesh Bank officials said the growing export earnings and slowed import payment will reduce the pressure on the country’s foreign exchange reserves.

The country's foreign exchange reserve stood at $30.36 billion on Wednesday, as per the BB data.